Do You Have Enough Prospects To Make Your Numbers?

Several years ago I worked with a CPA who wanted 20 new clients. We came up with a great direct marketing campaign that brought in 10 leads per 1,000 letters. His closing rate was 10%, so after his first few clients came on board, we calculated that acquiring new clients was costing him between $500 and $600. He liked the numbers (one client was worth about $8,000/year), but progress was slow. We advised him to open the spigot and mail 5,000 at a time, instead of the 1,000 he was sending. It worked, and he acquired the new clients he was looking for sooner rather than later.

I do quite a bit of public speaking on direct marketing. One question I like to ask my audience is "How large is your database?" I get answers anywhere from 100 to 250,000. I worry about companies who don't have at least 2,500 names in their databases. Unless they're selling high six-figure products or services or have a closing rate near 100%, they don't have enough prospects to meet their numbers.

Database marketing is all about up-selling and cross-selling your existing customers and targeting prospects to find qualified buyers who are ready to buy now. It's a numbers game. The more you put into the funnel, the more orders that come out at the other end. Here's the formula for calculating how many leads you'll need this year:

Annual projected sales / average order size / sales close percentage rate.

Let's say your annual sales quota is $750,000. An average order is $1,000. You're a pretty good sales person so let's say your closing rate is 40%. Using the formula above ($750,000 / $500 / 40%), you'll need 3,750 new leads, or 313 new leads per month. If you're relying on traditional prospecting like shoe leather (networking, clipping "prospects" from the paper, telemarketing), you're not going to get "there" in time! The fastest way to build a client base is to build a database of qualified prospects. Consider these shortcuts:

1. Buy a targeted prospect mailing list. Review your top 20 customers and figure out the demographics that make them ideal customers for your business. Then buy lists of these prospects. There are 40,000 different prospect lists on the market; you'll need to find the best 3 to 4 that fit your "profile." You may find it faster and cheaper to have a mailing list broker help you find these needles in the haystack.

2. Capture targeted leads off the Internet. Rather than cut and paste, you can use data capture software to compile your own chamber lists, membership lists, yellow pages listings, and email signatures in an Excel-spreadsheet-like format, which can then be downloaded into ACT! or any database.

3. HP, the printer company, did a study that showed 80% of a buyer's sales decision is made by the time he calls you. Consequently, your goal is to make prospects call you. With enough prospects, you can start a drip-marketing campaign to educate and qualify them. Use direct mail letters and postcards to drive prospects to your website, where you can then capture their opt-in email addresses to start email marketing campaigns.

Do the math! Start building and marketing to your prospect database now, and you'll meet your numbers by year-end.

Lori Feldman is president of Aviva, a mailing list and database marketing and Internet consulting firm and an ACT! Software Certified Consultant. She is this year's Direct Marketer of the Year, awarded by the Direct Marketing Assn. of St. Louis. Reach her at http://www.aviva-aviva.com/FreeContactMagne t.html

---

The Top 10 Myths About the Sales Profession

Myth 1: Sales People are all Shady!In the Broadway play... Read More

The Trusted Advisor Relationship: What Is It, and What Should It Be?

For the past months, maybe a year, I've been hearing... Read More

Nothing Happens Until Someone Sells Somthing

You can always tell a good salesperson, they are always... Read More

Why USPs Dont Work

The USP (Unique Selling Proposition) is based on the assumption... Read More

Losing the Big-One: Salvaging Lost Accounts

After careful consideration, we have chosen our vendor, and it's... Read More

Making the Sale When the Customer Wont Buy

Ever had a party online or offline, and had guests... Read More

Throw Out Your Selling Language - Unlock Your Natural Voice

I was sitting at my desk last week when my... Read More

The Power of Thank-You

When was the last time you thanked your customers?This often... Read More

Selling for Beginners

Speak to almost any self employed professional and most of... Read More

Give Up the Need to Sell

Most business people will tell you that selling is not... Read More

Things You Need to Know Before Joining a Direct Sales Company

A lot of people are very intrigued by the idea... Read More

How To Shorten The Selling Cycle And Reduce Buying Stalls

The main reason for buyer resistance and selling stalls boils... Read More

Cold Calling Reluctance

Most salespeople I know consider cold calling a dreadful, but... Read More

5+5 = Your Dream

JOHN DI LEMME ON "5 + 5 = Your Dream"... Read More

Going the Extra Mile and Getting Referrals

Successful salespeople have the ability to turn the customers they... Read More

Revenue Growth Through Alliances

Any company in today's global economy must eventually face the... Read More

The Damaging Admission - A Persuasive Technique

We would all like to think that our product or... Read More

What Do Mobile Auto Detailers Clean When it Rains?

A mobile auto detailer and their profits are tied to... Read More

How to Leverage Your Influence

Why do we get into sales? Typically it is two... Read More

Dont Call Me

The March, 2004, issue of Psychology Today reports on an... Read More

Lazy Man?s Way To Get Customers

No matter how big or small your business is and... Read More

Restaurant Pressure Washing

Many pressure washing companies try to stay away from the... Read More

Use Pain To Get Commitments

Whenever I speak with new salesreps and entrepreneurs, I hear... Read More

When the Nose of the Camel is in the Tent

My new job was to sell Commercial Service Agreements. It... Read More

Generating Sales Leads

Any company that relies on selling a product or service... Read More

Lead Generation Sins - 7 Of Them!

I really just don't get it.How can so many businesses... Read More

Selling: an art of a skill?

Selling is as much an art as it is a... Read More

Customer Service Revival

Value is in the Eye of the BeholderSales today is... Read More

Write On The Money: The Ten Commandments (Plus Five) Of Profitable Sales Letter Writing

According to the Direct Marketing Association, in 2003 U.S. direct... Read More

Stop Telemarketers, Do Not Call List or Not

American consumers have spoken and have done so loudly registering... Read More

Use Bundling To Increase Your Profits And Sales

Use Bundling To Increase Your Profits And Sales An effective... Read More

The Top 10 Ways to Add Extra Value

Everyone wants the best possible value in every transaction, but... Read More

Are You Scaring Your Customers Away?

"Hello, is (pause) puh-TREE-shuh home?"So started my weekend lesson in... Read More